Businesses and essential workers fail in final CT budget deal
As state lawmakers on Monday moved to cut taxes for working families and motorists, the new budget they plan to pass will not do as much for businesses and private sector workers on the front lines of the pandemic – even if the current budget surplus of $4 billion increases further.
Despite this huge tax cushion, the budget that begins July 1 will include $30 million to help businesses replenish a $495 million hole in Connecticut’s unemployment trust, sources say.
It also has $30 million for special pay for thousands of health and social care workers, grocery store and department store workers, emergency personnel, utility workers and others who provided essential services when COVID-19 hit Connecticut hard in 2020. That’s 1/25th of the level that union rights advocates said was needed to provide a one-time bonus of about $2,000 to each worker full-time essential.
Governor Ned Lamont and his fellow Democrats in the legislative leadership released extensive details last week about the $24.2 billion budget they negotiated, but acknowledged that a few key elements, including trade initiatives and unions, had not yet been settled.
But the talks ended on those points over the weekend, with the House of Representatives due to debate the budget on Monday. The Senate is tentatively expected to vote late Monday or Tuesday, depending on when the House resolves the budget.
Leaders of the Democratic majorities in the House and Senate said they were confident a new budget would pass before the end of the 2022 regular session of the General Assembly at midnight Wednesday.
Businesses on the hook for big unemployment debt
Lawmakers are expected to focus much of their debate on a tax cut plan that includes:
• An expanded property tax credit as part of the state income tax for the middle class;
• A one-time credit of $250 per child for low- and middle-income families;
• A cap on municipal property taxes on non-commercial passenger vehicles at 32.46 thousandths;
• Expanded income tax relief for Connecticut’s working poor;
• And an extension of the state tax exemption on gasoline until December 1st. That exemption, which passed earlier this spring and suspends the 25-cent-per-gallon retail sales tax on fuel, was originally scheduled to end June 30.
The companies were hoping to make this list, noting that they are on the hook for a big state review this fall.
Connecticut borrowed more than $800 million from the federal government at the height of the pandemic to maintain the solvency of its unemployment trust and provide unemployment benefits to more than 290,000 filers.
The state spent $155 million last year to reduce that debt, and the state Department of Labor announced last week that $495 million remains to be paid.
Businesses are normally assessed to replenish the fund, but the Connecticut Business and Industry Association has lobbied for the state to cover most or all of that.
With $3.1 billion in the emergency budget reserve and $4 billion planned for this fiscal year’s surplus, there’s no reason the state can’t sign that check, Chris said. DiPentima, President and CEO of Corporate Lobby.
“We have one of the biggest labor crises in the country,” he said, noting that about 109,000 jobs lost during the pandemic still haven’t been recovered. “Yet we play with small dollars on the user interface [trust] when we could afford much more.
Sources close to the budget process said rising state and corporate tax revenues would push the current surplus of several hundred million dollars above the $4 billion mark. Legislature and governor fiscal analysts are due to submit updated revenue projections to leaders of both branches on Monday.
DiPentima also predicted that the state’s refusal to cover more trust fund debt would weaken overall business confidence.
“This will cause the business community to question [officials’] commitment to making Connecticut more affordable and to economic development in general,” he said.
But Lamont and many lawmakers have noted that Connecticut still carries far more long-term debt than most other states. Connecticut has more than $95 billion in unfunded obligations for retirement and health care programs, as well as bond debt.
Since the $3.1 billion rainy day fund is at its legal maximum – at 15% of annual operating costs – any unspent surplus would be used to pay down pension debt.
Over the past two years, the state has used surpluses to make $1.7 billion in additional debt payments, and administration officials have said the state could repay an additional $2 billion or more after the end of this fiscal year on June 30.
Essential workers receive a tiny fraction of the pandemic wage sought
Companies were not the only ones disappointed by the final budget negotiations.
The $30 million included for the pandemic payout for the private sector comes after months of lobbying by unions, Connecticut’s AFL-CIO and other frontline worker advocates who said $500 million $1 billion should be spent to reward those who risked their lives. lives.
Rob Baril, president of SEIU 1199 NE, the state’s largest healthcare worker union, frequently reminds lawmakers that thousands of its members have stepped up to protect Connecticut’s elderly, disabled and other at-risk people. in nursing homes, group homes and clinics.
“The State of Connecticut manages a $4 billion surplus and $3 billion in the Rainy Day Fund, while frontline caregivers in group homes and nursing homes struggle to survive,” the union wrote in a statement last week, adding that 25 members have died. due to complications from COVID-19, and many more are struggling with medical debt.
Dozens of 1,199 members gathered outside Lamont’s Greenwich home in December, chastising the wealthy businessman for failing to prioritize a union-standard “hero’s pay” package.
“Where is our Thanksgiving and Christmas?” asked protester Cynthia Johnson of New Haven, who wore a Grinch hat as dozens of other protesters chanted “Fix the broken system” and “Shame on you.”
The governor and legislature earmarked $34 million in ARPA resources last year to cover some of the lost wages and medical costs incurred by frontline workers.
But critics say it’s far too little.
The $34 million, they say, was a bone thrown away by lawmakers who failed to convince the governor to change the workers’ compensation system. Workers’ rights advocates have argued that any worker exposed to COVID and facing lost wages or healthcare costs should be automatically eligible for workers’ compensation benefits.
Nonpartisan analysts estimated that would be enough to provide about $2,000 for most full-time workers in front-line jobs and $1,000 for part-timers.
It was unclear how much per capita relief could be provided with a $30 million pandemic wage allowance earmarked only for private sector workers.
But Rep. Robyn Porter, D-New Haven, who co-chairs the labor committee, said a majority of essential workers are in the private sector and $30 million wouldn’t provide remote benefits close to $2,000. per person.
Porter added that the irony is that pandemic pay proposals continue to be cut, even though the state’s surplus forecast has increased by more than $1 billion in less than a month. .
“Why do we hustle [now] find money to pay for the pandemic? Why were essential workers not our heroes from the start? ” she says.